Feeds

EE's revenues dip, but smartphones lure in 200k new contracts

4G not the promised goldmine, though

Top 5 reasons to deploy VMware with Tegile

UK telecoms giant EE's first annual results are in, showing cost savings and revenue growth wiped out by regulatory changes, but customer numbers are up - even if it's not 4G that's attracting them.

The UK's biggest network operator posted full-year earnings of £1.41bn for 2012 before the numbers for tax and depreciation (EBITDA) on revenues of £6.65bn pounds, but that wasn't quite enough to make a profit. Instead EE saw an overall loss of £249m, despite adding 201,000 contract customers, increasing revenue, and cutting costs, because regulatory changes - notably the cut in mobile termination rates - cost it dearly.

Take those changes out and revenues would be up 2.7 per cent compared to 2011.

But it does seem that EE is positioned well for 2013, as 4G is attracting customers and 4G customers pay an average of 10 per cent more for their contracts. The company also said that its 4G monopoly has paid off to some extent. Quite how much it won't say - there aren't any numbers for 4G subscribers. EE says that's to prevent interference with the ongoing auction, but as industry analysts at Ovum point out:

If customer uptake was far ahead of expectation, then we would hear about it. We therefore have to conclude that uptake has not been spectacular.

The analysts also noted that EE's premium pricing of 4G is unique in developed markets. Neither Japan, South Korea nor the USA charge significantly extra for LTE services - but then none of those countries gave a single operator quite such a monopoly as EE achieved in the UK.

EE was formed by the merger of Orange and T-Mobile, so has been busy switching off 2,659 cell sites (duplicates, one would hope) and closing stores (78 to be shuttered, some still in progress) so the savings are on track and operational costs should continue to decline.

Churn is very low, 1.4 per cent, and more than half of EE's customers are on contracts these days, which increases loyalty and Average Revenue Per User (ARPU) too. That ARPU is, however, still coming from voice services. EE is justifiably proud that "non-voice revenue" now makes up 50 per cent, but look a little closer and one sees that SMS is still important as data only makes up 34 per cent of what customers pay.

EE has successfully launched a new brand, rolled out a working 4G network and increased both revenue and customer numbers, but it hasn't really exploited the 4G monopoly as many had expected it would. Like the rest of the industry, it appears to still be clinging to a world of voice and text services which is slowly disappearing. ®

Beginner's guide to SSL certificates

More from The Register

next story
The 'fun-nification' of computer education – good idea?
Compulsory code schools, luvvies love it, but what about Maths and Physics?
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Yes, yes, Steve Jobs. Look what I'VE done for you lately – Tim Cook
New iPhone biz baron points to Apple's (his) greatest successes
Lords take revenge on REVENGE PORN publishers
Jilted Johns and Jennies with busy fingers face two years inside
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Edward who? GCHQ boss dodges Snowden topic during last speech
UK spies would rather 'walk' than do 'mass surveillance'
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.